Retirement Planning > Retirement Investing

Study Points to Growing Focus on Retirement Income Offerings Among Firms

Your article was successfully shared with the contacts you provided.

Financial services firms are attaching greater importance to marketing and developing retirement income offerings for clients, particularly investors ages 52 and under, according to a new survey.

Hearts & Wallets LLC, Hingham, Mass., released this finding in its fourth annual retirement income management survey, which reports on retirement income priorities of nearly two dozen financial services firms in the spring of 2012. The study was conducted by the company’s two retirement market research experts: Chris J. Brown of Sway Research; and Laura Varas of Mast Hill Consulting.  

“Firms are responding to investor needs to assess their entire financial picture from when to take Social Security to real estate, taxes and healthcare, reversing a pullback we saw in 2010,” says Varas in a prepared statement. “As the scope and offerings of retirement income expand, advisors will be supported with more training and smart tools. And firms are finally beginning to devote more resources to young and mass market investors.”

The importance of marketing and/or developing retirement income offerings jumped in importance 39% among strategic priorities in just two years, coming in a close second to new customer acquisition at 82%, the report states. In 2012, 77% of firms rated retirement income as “vitally or very important” to strategic planning initiatives over the next one to three years, as compared to 57% in 2010, the report says.

The report anticipates the following emerging trends in the retirement income market:

Expanded scope of retirement goals and general advice—The report reveals that offerings will expand to present the whole financial picture, including health (including life and long-term care insurance), taxes, real estate, lifestyle considerations (including estate planning and couples dialogue) and optimal timing on how to take Social Security.

Advances in income annuities optimization approaches. More than three-quarters (77%) of respondents indicate that developing better retirement income capabilities is a top priority

Boom in advisor education. Firms plan to make advisor education a major priority, the report states, adding that advisors need more support to execute expanded scope, illustrate tradeoffs, annuity optimization and advice on account draw-downs and savings.